State Sen. Eliot Bostar of Lincoln speaks about his bill to prohibit using Nebraska Universal Service Fund dollars on wireless companies with Huawei or ZTE equipment on their networks. (Aaron Sanderford/Nebraska Examiner)

This story was originally published in the Nebraska Examiner.

LINCOLN — A Nebraska state senator is proposing a novel way to shoot down potential surveillance by the Chinese state. His legislative bill would use the power of the purse to encourage cell phone service providers to ditch equipment from Chinese communications firms.

Legislative Bill 63, proposed by State Sen. Eliot Bostar of Lincoln, would prohibit the Nebraska Universal Service Fund from distributing fees wireless companies gather from the state’s customers to firms using Huawei or ZTE equipment on their network.

Companies mainly use Universal Service Funds to maintain wireless networks, officials said. The bill’s language excludes access to the funds by any firm using equipment manufactured or sold by companies that the Federal Communications Commission has deemed a threat to national security. 

The federal government already bans the use of federal Universal Service Funds on equipment from Chinese telecommunications companies Huawei and ZTE. Nebraska would be following suit with state funds, Bostar said during a news conference before Tuesday’s hearing on LB 63.

In 2022, the Federal Communications Commission adopted new rules banning the importation or sale of Huawei or ZTE communications equipment. But billions of dollars of the equipment had already been installed in networks around the U.S., including in Nebraska, Bostar said. 

“Of particular concern was that Huawei was routinely selling cheap equipment to rural providers in cases that appear to be unprofitable for Huawei, but which placed its equipment near military assets,” Bostar said, citing sales to companies including Viaero Wireless in Nebraska. 

U.S. Rep. Mike Flood, R-Neb., speaks in support of Legislative Bill 63, which would ban the use of Nebraska Universal Service Fund dollars on any wireless company with a network that includes specific Chinese communications technology. (Aaron Sanderford/Nebraska Examiner)

Huawei has denied that its equipment is a spying threat. But the Chinese state helped finance the company, and it was founded by former members of the Chinese military. ZTE has denied spying as well. Tech experts have said the Chinese state can force Chinese companies to share information on specific users. 

Bostar said the U.S. military and other experts who have studied the equipment have found it “capable of capturing and potentially disrupting highly restricted airwaves used by the military, specifically U.S. Strategic Command, which oversees the U.S. nuclear arsenal.”

U.S. Rep. Mike Flood, R-Neb., a former state senator who has been highlighting the national security threats posed by Chinese technology and the Chinese state, visited the Nebraska Legislature on Tuesday to support Bostar’s effort.

“We don’t want to maintain systems that we feel are a threat to national security,” Flood said.

Flood said Nebraska is the first state to propose banning state-distributed funds from firms with the Chinese tech. It’s part of a broader push to reduce U.S. use of Chinese technology, including federal efforts to ban TikTok, a popular social media platform. 

“It’s the collection of data,” Flood said. “It’s the ability to use artificial intelligence to take different sources of data and make predictions, affect behaviors and be able to coordinate any kind of operation, whether it be a military … commercial … or something that affects citizens.”

Flood has been pressing the Biden administration and the Commerce Department to investigate how much Huawei equipment is on cell towers near sensitive military installations in Nebraska, including nuclear missile silos in western Nebraska, and Offutt Air Force Base near Bellevue, in eastern Nebraska.

Bostar confirmed Tuesday the discovery of the Viaero equipment near western Nebraska missile silos, but neither he nor Flood would say whether any had been found near Offutt. Flood said he’s awaiting what may be a classified briefing with the Commerce Department.

Congress has set aside $1.9 billion to offset service providers’ costs to replace the Huawei equipment, but Bostar said the costs outstrip the funding by billions of dollars. Flood and Bostar said the Commerce Department could end up outlawing the equipment.

State Sen. Suzanne Geist of Lincoln, who chairs the Legislature’s Transportation and Telecommunications Committee, said she supports LB 63. She said protecting Nebraska’s telecommunications system is an important part of protecting national security.

“LB 63 will reward vendors who choose to not do business with Huawei or ZTE,” Geist said. “This allows a company to have a competitive edge if they are responsible and look out for our country’s security interests.”

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